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Essay text:
We considered costs to be variable if the expenses on the income statement were directly influenced by revenue hours on Exhibit 1 in the case.
Question 2
- Power cost per revenue hour is $4.70/hr
- Operations hourly personnel: $24.00/hr
Variable cost per revenue hour is $28.70/hr
Question 3
- Price per unit is $400/hr internal and $800/hr external
- Intracompany contribution margin: $371.30/hr
- Commercial contribution margin: $771.30/hr
Assume STC will fully utilize their allowable hours. The next allowable hour will be a commercial hour; therefore we consider the contribution margin to be the commercial contribution margin of $771...
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